Reliance Industries Limited (RIL), the Mukesh Ambani's venture is reportedly considering an Initial Public Offering (IPO) for Reliance Jio in the next couple of years, according to a person in the knowledge of the matter said to Livemint. RIL, the parent company is planning to list RJIL (Reliance Jio Infocomm) on the exchanges if the company's consumer businesses overtake energy business in terms of revenue, the same person said requesting anonymity. “Reliance Jio’s plans are massive, and when it reaches that stage, the company shouldn’t be a 100% subsidiary of a refinery company,” the person said.
Within no time, Reliance Jio achieved 186.6 million subscribers and has changed the entire scenario of Indian telecom sector with its aggressive tariff plans and strategies. Reliance Jio is currently the fourth largest telecom operator in terms of subscriber base, while the Revenue Market Share of the company has recently surpassed Idea Cellular. “The consolidation of the industry into about three large operators and an increase in Reliance Jio’s market share will set the stage for the listing of the company,” added the report.
“Many RIL investors don’t understand data services or digital services and many of those who want to invest in digital services may not want to invest in refineries,” the person cited above said. “At some point, when everything has stabilised, you will have to give investors options to invest where they want to,” the same person said.
Furthermore, he added “If we keep Reliance Jio as a 100% subsidiary of RIL, some RIL investors are bound to say that they don’t understand digital services. Which is one of the reasons our stock price doesn’t reflect our true potential.” He further added that RIL’s consumer business would be on a “par with its energy business in three years”.
At the moment, Jio's goal is to increase the subscriber base and become the leader in the Indian telecom sector. “There is no cutoff time, and there are a lot of decisions that need to be taken (for the listing to happen),” the report further added. However, he quickly rubbished that “Reliance Jio separate from RIL is going to be a complicated decision, which not many at the company are currently prioritising.”
This is not the first time we're hearing about Jio's IPO. Earlier in December 2017, a report from Bloomberg also stated that RIL is considering IPO for Jio in early 2019, but this report says that it might happen only if RIL's consumer businesses overtake energy business.